Nicholas Moore to retire as Macquarie CEO as Wikramanayake steps up

By Miriam Steffens & Caitlin Fitzsimmons

26 July 2018 — 8:36am

Macquarie Group's Nicholas Moore will retire as managing director and chief executive after a decade at the helm and be replaced by Shemara Wikramanayake, the current group head of Macquarie Asset Management.

Mr Moore will step down from the boards of Macquarie Group and Macquarie Bank effective November 30 after delivering the group’s first-half results, the company said in a statement to the ASX on Thursday morning. Ms Wikramanayake, who was born in the UK before her family moved to Australia, becomes the only female CEO among Australia's 20 biggest companies by market value.

Nicholas Moore is stepping down in November.Credit:Jim Rice

Ms Wikramanayake, 56, joined Macquarie in 1987 and worked with Mr Moore in corporate services, before establishing Macquarie Capital, which at the time included advisory, infrastructure funds, corporate leasing and lending, and cash equities. She became head of Macquarie Asset Management in 2008 when Mr Moore became CEO.

In a call to media, Mr Moore said leading Macquarie had been his "great joy and privilege" but it was "hard to pick a particular highlight". During his tenure as CEO, Macquarie acquired Delaware Investments in 2009, started and grew the energy business to become the second-largest gas trader in the United States, and continued growing profitability and expanding the group across all its businesses.

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Mr Moore said he had worked with Ms Wikramanayake for more than 30 years and he was "reassured in deciding to retire later this year that I leave Macquarie in a strong position and safe hands".

“In terms of why there always has to be a time and it was a challenging decision but after 10 years I felt the time was right, with the business in a very strong position today and with Shemara an outstanding successor," Mr Moore said.

Shemara Wikramanayake will be the new boss of Macquarie.Credit:Nic Walker

Ms Wikramanayake will inherit a company that's transformed itself under Moore's stewardship from an Australian investment bank into a global asset manager that now earns more than two-thirds of its income overseas. Its asset management, financial services and corporate finance businesses now account for 70 per cent of earnings. Macquarie's share price has more than doubled under Mr Moore's tenure.

The shares fell as much as 4.7 per cent in early trade Thursday, the biggest intraday decline since February. 6. They pared losses to close down 2.6 per cent at $121.70.

Ms Wikramanayake has worked for Macquarie around the world, including establishing its infrastructure funds in the US and Canada. Under her leadership, Macquarie Asset Management has become the company's fastest-growing and most successful division, employing more than 1600 staff in 23 countries.

The division manages $495 billion of assets ranging from toll roads and real estate to stocks, bonds and currencies and delivered net income of $1.7 billion in the year ended March 31, accounting for almost two-thirds of Macquarie Group's profit.

"She's the right person for the job," Bell Potter Securities head of research TS Lim said, citing her track record of delivering profits at the asset management arm and strong people and management skills. "I don't expect any change in the business model. They've de-risked the businesses since the global financial crisis and the returns are very good right now."

She also got support from industry peers. "It's fantastic to see Shemara [Wikramanayake] step into the role”, Westpac CEO Brian Hartzer said.

Keeping the legacy

Ms Wikramanayake said she wanted to "perpetuate the legacy Nicholas leaves behind" and would be spending a lot of time working with him during the handover, and travelling to different parts of the business.

“I don’t feel any urgency to change, it’s not like when I stepped into asset management after global financial crisis," she said.

Ms Wikramanayake acknowledged she was a rarity as a senior woman in the finance sector and said more should be done to attract and retain women to the industry, including providing workplace flexibility to both men and women, and examining unconscious bias. However, she said Macquarie had a "wonderful culture".

“Macquarie in the 30 years I’ve been here has always been a meritocracy, I've never felt barriers," Ms Wikramanayake said. "I’ve never found inside Macquarie the quality of my ideas is judged on my gender, my ethnicity, my size, it's really about the quality of my ideas."

Logical choice

She said there were challenges ahead but that had an upside for a business like Macquarie that is well capitalised and well positioned to exploit opportunities.

“There are always challenges – going back to 1987 when I started," Ms Wikramanayake said. "With a challenge there’s always an opportunity. Without the global financial crisis, we wouldn’t have been able to step up and acquire the Delaware business."

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Ms Wikramanayake was the Millionaires' Factory's second-highest paid executive last year, receiving a total pay packet of $18.9 million for running the bank's asset management arm. Mr Moore was the biggest earner with remuneration totalling $19.65 million, and was one of five executives to take home remuneration of more than $10 million.

Chairman Peter Warne pointed to Ms Wikramanayake's "international track record, vision and strong sense of our unique culture to make this a very successful transition". "It wasn't an easy decision but it was a great decision to make in the end," he said.

Leading the group's most profitable division, Ms Wikramanyake has long been seen as a potential successor for Mr Moore. Bank sources told Fairfax Media for a profile on her six years ago that she was a logical choice for the top job as she was "trusted by Nick Moore. Shemara is the only one [of the bank's top executives] who came through the GFC unscathed. No transactions which went pear-shaped."

"She's calmly spoken, has experience in Asia and in corporate finance, and she's super-smart," is how she was described by another insider.

In a trading update separately released to the ASX on Thursday ahead of its annual general meeting, Macquarie said its operating groups were "performing well" during the first quarter of fiscal 2019 ended June 30, and that the operating group contribution during the quarter was up from the previous year but down from the bumper March quarter. The bank maintained that it expected fiscal 2019 results to be in line with the previous year's record profit.